How to Handle Social Security and Medicare Benefits as a Pastor
Oct 15, 2025Pastors spend their careers serving their churches and communities, but it can be hard for them to figure out how to use Social Security and Medicare benefits. Pastors need to know how these federal programs relate to them because they have different tax laws, self-employment issues, and eligibility requirements. This complete guide will answer all of your questions about how Social Security and Medicare benefits work for pastors. It will cover everything from paying self-employment tax to opting out, figuring out benefits, signing up for Medicare, and planning your retirement with confidence.
Learning the Basics of Social Security and Medicare
The federal programs Social Security and Medicare help elderly and disabled workers and their families pay for health care and living expenses. Social Security pays for retirement, disability, and survivor benefits based on how much money you made in the past. Medicare is a federal health insurance program that mostly covers persons 65 and older. Part A covers hospital care, Part B covers medical services, and Part D covers drugs.
Social Security and Pastoral Work
Pastors have a distinct status under IRS rules that ordinary employees don't have. Even if they are treated as employees for income tax withholding, they are nonetheless self-employed for Social Security and Medicare tax reasons. Pastors who work for themselves have to pay taxes. Pastors have to pay self-employment tax (SECA tax) on all of their ministerial income, such as their salary, housing allowance, and fees for services. The self-employment tax rate is about 15.3%, which includes payments to Social Security and Medicare. You have to pay this tax on top of your ordinary income tax.
How to Figure Out Self-Employment Tax
Self-employment tax only applies to money made from governmental work. It may not apply to revenue that isn't from a ministry. You can figure it out using Schedule SE (Form 1040).
Choosing Not to Pay Social Security Exemption for Religion
Using IRS Form 4361, some clergy may be able to get out of paying self-employment tax for religious reasons. The minister can only get the exemption if he or she is strongly against getting Social Security and Medicare benefits. If you choose not to participate, you won't have to pay into Social Security or Medicare, but you also won't get any benefits.
What It Means to Opt Out
You will lose your Social Security retirement, disability, and survivor benefits. Social Security does not make you eligible for Medicare. It could be hard to get other health insurance.
Pastors Can Get Social Security Benefits
Who Can Apply
To be eligible for Social Security payments, you must earn enough "credits" by paying self-employment tax. You usually need 40 credits, which is around 10 years of labor, to get retirement benefits.
Calculating Benefits
The average indexed monthly earnings (AIME) are used to figure out benefits. Social Security has a progressive payout system that favors people who make less money.
Benefits for Spouses and Survivors
Based on the pastor's earnings record, spouses may be able to get benefits. Dependents can get survivor benefits.
Getting Medicare for Pastors
Who Can Apply
If you have enough work credits, you can usually get it at age 65. People who choose not to pay into Social Security may not be able to qualify through ministerial earnings.
Some Parts of Medicare
- Part A: Hospital insurance (typically free if you have enough credits)
- Part B: Health insurance (you have to pay monthly premiums)
- Part D: Coverage for prescription drugs
Times to Sign Up
The first time you can enroll is three months before and after you turn 65. The general enrollment period is from January 1 to March 31 every year, and coverage starts on July 1. Special Enrollment Periods are for people who already have insurance.
Putting Together Social Security and Medicare with Ministry Income
Learn how your housing allowance and other ministerial income affect your Social Security benefits and taxes. Plan for Medicare premiums and possible fines if you wait too long to sign up. Think about getting extra insurance to fill in the gaps.
Planning and Reporting Taxes
Report ministerial salary and housing allowance correctly. Get the self-employment tax right. Know how not filing affects your taxes.
Making Plans for Retirement with Medicare and Social Security
When budgeting your retirement income, don't forget about Social Security and Medicare benefits. Work together with retirement funds including IRAs, 403(b)s, and personal savings. Keep an eye on changes to Medicare and Social Security rules.
Questions and Problems That Come Up Often
- Can ministers get Social Security benefits on money they make that isn't from being a minister?
- What effects does part-time ministry have on benefits?
- What happens if you choose to opt out and then choose to opt in again?
- What to do if you have gaps in your work history or self-employment?
How Church Law and Strategy Help Pastors
Regan runs Church Law and Strategy, which gives pastors specialized advice on Social Security, Medicare, tax compliance, and retirement planning. Our membership levels, such as THE FOUNDATION PLUS PLAN and THE PASTOR SUPPORT PLAN, give ministry leaders continuous legal and financial help that is suited to their needs.
Links Inside
- Find out more about the legal strategy for pastoral recompense.
- Look at church legal audit and compliance reports.
- Learn about consulting for church tax strategies.
Links to Other Sites
- SSA Social Security for Ministers: https://www.ssa.gov/pubs/EN-05-10056.pdf
- Medicare Official Site: https://www.medicare.gov
- IRS Ministers’ Tax Guide: https://www.irs.gov/charities-non-profits/ministers-income-tax-guide
This blog is not legal or financial advice; it is intended for informational reasons. Talk to licensed professionals for advice that is particular to your circumstance.
